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New Technology, Automation Stand to Reshape Modern Supply Chains

​Los
Angeles – September 14, 2016 – Rapidly
emerging advancements in technology such as autonomous trucks, 3D printing and
warehouse automation will foster dramatic changes in how shippers, retailers
and manufacturers configure their supply chains and distribution strategies,
spurring a need for different formats and locations for industrial real estate,
according to a new report from CBRE
Group, Inc.

Taken
together, these advancements will encourage industrial users to modernize their
networks to adapt to the fast-evolving market rather than inherently requiring
them to add more or fewer warehouses and distribution centers. Each of these
technology categories are on track to reach widespread use by 2025.

“Autonomous
vehicles, 3D printing and warehouse automation stand to reshape supply chains
on an unprecedented scale, but real estate won’t be innovated out of that
equation,” said David
Egan, CBRE’s Head of Industrial & Logistics Research in the Americas. “While
use of autonomous vehicles in shipping likely will allow for a greater emphasis
on a few massive distribution centers in far-flung, less expensive locations,
3D printing meanwhile will result in many users needing more industrial space
closer to customers to facilitate on-demand, custom manufacturing.”

The
CBRE report includes in-depth examinations of each of the three areas of
technological advancement and their likely impact on the industrial and
logistics markets.

Autonomous
trucking: Labor represents roughly 75% of the cost of
shipping a full truckload across the U.S., and drivers are limited to 70 hours
of driving a week, equating to 3,000 miles. The advent of autonomous vehicles
will allow cargo to travel greater distances in less time, saving costs. This,
in turn, will allow some users to operate more extensively from large
distribution centers in outlying locations, where land is less expensive.

3D
Printing: The ability to manufacture certain items on-demand
will spur a horizontal shift in the supply chain. Whereas this advancement may
lessen the need for centralized distribution space in some cases, it also
increases the requirement for bulk, raw materials to be stored at printing
sites close to the consumer in last-mile distribution facilities.

Automation
in industrial facilities: A greater use of robots and other automated
technology stands to reduce labor costs and increase efficiency. However, it
also will stoke demand for modernized industrial buildings equipped to
accommodate the design requirements and IT infrastructure of automation.

“The
combination of the burgeoning growth of e-commerce and the mainstream emergence
of these technological advances has ushered in a far-reaching evolution of the
physical supply chain,” said Scott
Marshall, CBRE’s Executive Managing Director of Industrial
& Logistics in the Americas. “Proactive industrial investors and users are
adapting to these changes now to capitalize on this new era of modern site
selection and supply-chain design.”